Business, 30.11.2020 18:30 gwendallinesikes

Speedy gas High Price Low price
Swifty Gas High Price $100, $100 $25,$150
Low price $150, $25 $50,$50

(Table: Two Rival Gas Stations) Use Table: Two Rival Gas Stations. The table shows a payoff matrix for two gas stations in a small town. Each firm can set either a high price or a low price, and customers view these two firms as nearly perfect substitutes. Profits in each cell of the payoff matrix are given as (Swifty's profit, Speedy's profit). Which statement describes a dominant strategy?

a. Swifty will always set a low price, no matter Speedy's choice.
b. Swifty will always set a high price, no matter Speedy's choice.
c. Swifty will set a low price when Speedy sets a high price, but Swifty will set a high price when Speedy sets a low price.
d. Swifty will set a high price when Speedy sets a high price, but Swifty will set a low price when Speedy sets a low price.

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Speedy gas High Price Low price
Swifty Gas High Price $100, $100 $25,$150
Low price $1...

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